Leading change and driving value through investor relations
Five key issues facing investor relations.
The IR Society’s annual conference in June provided an opportunity to reflect on the changing environment for the investor relations community and the impact of ongoing regulatory changes. The day consisted of keynote speeches, plenary and break-out sessions and incorporated speakers from a range of backgrounds including investor relations officers, Board members and institutional investors. The key issues they raised during the day included:
Purpose and values
The complex needs of a broad range of stakeholders are increasingly important to a company’s long-term performance. To manage this complexity, a company’s purpose and values play an important role in guiding behaviours and leading sustainable success.
A hot topic at the conference! Over the past 12 months, the interest in environmental, social and governance (ESG) factors has grown rapidly as society as a whole evolves and younger generations in particular find these issues more important. Fund managers are now taking material ESG factors into account when making investment decisions and companies are responding by developing their reporting and communications activities, for example by holding ESG days.
Diversity in its broadest sense contributes to performance by introducing a wider range of perspectives, skills and experience into a company and the Board of Directors. However, it is taking a long time for Boards to change their attitudes and approach to diversity. So some speakers felt there needs to be a greater sense of urgency.
Employees on the Board
Although companies may be approaching the requirement to have an employee voice on the Board in different ways, the key point is that it allows employees to input their views into the Board and hearing from employees directly is much more impactful and meaningful for the Board when making decisions. Consequently, issues are being managed differently than they might have been previously.
As the quality of sell-side research and corporate access declines following the introduction of Mifid II, companies, in particular smaller companies, are taking greater ownership of their communications activities and making more use of channels such as the annual report and website to reach out to existing and potential investors.
These issues demonstrate the need for companies to consider the bigger picture and take a broader range of issues into account when engaging with their investors and other stakeholders. We can help companies to navigate the changing landscape and develop their communications in line with evolving best practice.
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